Eurozone in tailspin after Greece votes 'No' to bailout

Update:
July, 06/2015 - 11:24

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ATHENS — Greek voters overwhelmingly rejected international creditors' tough bailout terms on Sunday, but premier Alexis Tsipras insisted the result does not mean a "rupture" with Europe despite fears it will end in a "Grexit" from the eurozone.

With the final tally showing the 'No' vote winning by more than 61 per cent, the historic referendum represented a victory for the radical left prime minister, who said his negotiating position to secure a new debt deal was now greatly bolstered.

As eurozone leaders scrambled to work out their response, German Chancellor Angela Merkel and French President Francois Hollande called a European summit for Tuesday and declared that the Greeks' decision must "be respected".

Thousands of pro-government supporters cheered and hugged each other in central Athens in celebration, although some other Greeks expressed pessimism that Tsipras would be able to deliver on his promises.

Figures released by the Interior Ministry showed the final tally at 61.31 per cent voting 'No' and 38.69 per cent voting 'Yes'. Participation stood at 62.5 per cent.

'Torn down the bridges'

European leaders reacted with a mix of dismay and caution to the resounding election results, which also sent the battered single currency plummeting.

Tsipras has "torn down the bridges" between Greece and Europe, Merkel's deputy chancellor, German Economy Minister Sigmar Gabriel, told the Tagesspiegel newspaper.

Despite the Greek premier's assertions, new bailout negotiations now were "difficult to imagine", he said.

European Commission president Jean-Claude Juncker – who had said a Greek 'No' would be "no to Europe" – was to speak to the European Central Bank (ECB) and eurozone finance ministers on Sunday and Monday.

The head of the Eurogroup of eurozone finance ministers, Jeroen Dijsselbloem, called the Greek 'No' result "very regrettable for the future of Greece."

In Asian trade, the euro help up against the dollar after dropping in the immediate wake of the vote, changing hands at $1.1024 to claw back some of the losses it suffered in New York electronic trade where it fell at one point to $1.0987.

Regional bourses sagged in the aftermath of the vote, led by Tokyo which was down 1.61 per cent as investors retreated while they watch Greece's creditors plan their next move.

In a televised address after the referendum, Tsipras insisted the vote did not mean a break with Europe. He has emphasised that euro membership is meant to be "irreversible" with no legal avenue to boot a country out.

"This is not an mandate of rupture with Europe, but a mandate that bolsters our negotiating strength to achieve a viable deal," he said.

Tsipras said the creditors – the ECB, the European Commission and the International Monetary Fund (IMF) – would now finally have to talk about restructuring the massive, 240-billion-euro ($267 billion) debt Greece owes them.

"This time, the debt will be on the negotiating table," he said.

Voters celebrate

Punching the air, kissing and cheering, the 'No' camp in Athens exulted as the results came through.

"This is a victory for the Greek people, a chance for Europe," said Giorgos, 25, who had rushed along with his girlfriend to join some 6,000 people celebrating their triumph.

"Spain, and then Portugal, should follow this path. We're for a Europe of the people," he said, brushing off concerns the result could see the debt-laden country plunge further into the financial mire.

"This is Europe's chance to become what it should have been in the beginning," said 37-year-old Dima Rousso.

While many of those who voted 'No' were youths hit by record jobless rates, there were also elderly people in the crowds, wrapped in Greek flags and dancing in time with the victory chants.

But the mood of jubilation was not shared by all 'No' voters, with some saying they had been confronted with an impossible choice.

"A 'No' victory doesn't mean there's any more hope for Greece than before," said Nika Spenzes, 33 and unemployed, who was walking in the opposite direction of the party.

Even 'Yes' voters were ambivalent about their camp's apparent defeat.

Greece's conservative opposition chief Antonis Samaras announced his resignation as the early results of the referendum became clear on Sunday. His New Democracy party had campaigned for a 'Yes' result in the referendum. -- AFP